Between year-end 2016 and June 2017, the fund raised its stock exposure by 2.6%. But if you’re Norway, that amounts to 208.52 billion kroner ($26.34 billion), more than its second-quarter returns.

The fund is the largest of its kind in the world with assets under management worth 8.02 trillion kroner ($1.013 trillion). Created on the back of the Scandinavian country’s oil riches to provide tNorwegians with a pension, it outstrips its Middle Eastern oil-fueled counterparts in size.

In the second quarter of 2017, the fund returned 202 billion kroner ($25.5 billion). It held 65.1% of its investments in stocks, bringing home 3.4% in returns. However, its equity mandate was increased to 70% in December 2016, and the fund isn’t yet done following through.

Norges Bank Investment Management

The fund’s market value was 8.02 trillion kroner as of June 30, 2017.

The market value of its stocks was 5.225 trillion kroner ($659.93 billion), up from 5.082 trillion ($641.87 billion) in the first quarter and 4.275 trillion kroner ($539.94 billion) in the second quarter of last year. Given that, there are another 392.98 billion ($49.63 billion) in shares out there that the fund needs to acquire to satisfy its mandate.

In the second quarter, European stocks accounted for 36.6% of the Norwegian fund’s holdings, returning 6.3%, while North American - mostly U.S. - shares accounted for 38.6%, returning a measly 0.7%, the fund’s quarterly report stated. Using this allocation, Norway is due to buy 145.4 billion kroner ($18.4 billion) in European equities and 153.26 billion kroner ($19.4 billion) in North American stocks in the future.

It also held almost 10% in U.K. stocks - a total of almost 802 billion kroner ($101.3 billion). The allocation in Britain accounted was the most negative contribution in the equity portfolio, the fund’s report said. Notwithstanding the currently unchanged regional split, this raises the question whether Norway would pull its money from Great Britain and put it elsewhere if performance continued to be weak.

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Anneken
Tappe

Anneken Tappe is a markets reporter for MarketWatch. She is based in New York.

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